ROGERS 4:43 PM 15960 edugenswileyplus.com ?|.9]? Kieso, Intermediate Accounting,

Question

ROGERS 4:43 PM 15960 edugenswileyplus.com ?|.9]? Kieso, Intermediate Accounting, 11e, Volume 2 Idenofy the type of change for each of the sittions Type of change 1. Change in a plant assets residual value 2. Change due to an overstatement of inventory in the precedingperiod) Change from sum-of -the-years-digits to saraight-line method of depreciation because of a change in the J. pattern of benefies received 4. Change in a primary source of GAAP Decihion by management to capitalice interest. The company is reporting a sell constbructed asset for the 6. Change in the rate usied oo calculane warrany costs 7. Change from an unacceptable accounting policy so an acceptable accounting polcy 8. Change in a patenies amortization period change was a resalt of experience with the project and improved ability to estimate the costs to complesion and therefore the percentage complete. Recogrition of additionallincome tax owing from ree years ago as a resut of improper calculations by the accoutare, who was not tamaar wwth ?come tax legislation and income tax returns

Explanation / Answer

Solution:

1. Accounted for prospectively

2. Accounted for retrospectively

3. Accounted for prospectively

4. Accounted for retrospectively

5. Accounted for prospectively

6. Accounted for prospectively

7. Accounted for retrospectively

8. Accounted for prospectively

9. Accounted for prospectively

10. Accounted for retrospectively

Explanation:

Prospective application refers to implementation of a new accounting policy to transactions after the date of the policy change, thus the recognition of the effect of changes in estimation of accounting in the current as well as future periods. However change is not applied to prior periods.

Retrospective refers to application of new accounting policies for transaction, event, or other circumstances as if it had been implemented.

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